By: Jennifer Saba
A.H. Belo is the latest newspaper company to announce deep cuts to its workforce and a possible sale of real estate holdings.
The pure-play newspaper company, which recently spun out from Belo Corp. with little debt, is looking to eliminate 500 positions through a series of buyouts. The move is expected to save $50 million.
“These initiatives address the adverse business environment facing the newspaper industry and the related negative perception of the industry’s future prospects,” Robert Decherd, A.H. Belo’s chairman, president and CEO, wrote in a letter to shareholders.
In its first quarterly report as a stand-alone newspaper company, A.H. Belo Corp reported a loss of $3.2 million, or 16 cents a share, on advertising revenue that sank 21%.
Employees at The Dallas Morning News, The Providence (R.I.) Journal, The Press-Enterprise in Riverside, Calif., and the Denton (Texas) Record-Chronicle are expected to receive severance offers this week. The process should be completed by mid-September and if not enough volunteers come forward, the company could resort to layoffs.
The board also signaled it might review its dividend policy. The company just declared a regular quarterly dividend of 25 cents per share last week.
A.H. Belo is eyeing its properties in downtown Dallas, which it jointly owns with Belo, and in Providence. The company could realize $35 million in pre-tax proceeds from a potential sale, Case reported.
“Straight math tells us that mid-teens revenue declines on a sustained basis do not produce a tenable business model,” Decherd wrote to shareholders.
As of late morning A.H. Belo (NYSE: AHC) is trading down 7.03% to $5.95.